Key Insights
- Last week, the price of Solana fell by nearly 6% to about $30.50.
- Between then and now, Solana has fallen by more than 20%.
- Over the last day, the cryptocurrency has fallen by a staggering 40% from a $31 high to the $17 zone where it now sits.
Last week’s bullish momentum in the Solana market ran out of steam in the middle of the price rally. Due to the crypto-focused hedge fund Alameda Research’s insolvency rumors, the bulls started to weaken in strength.
Last week on 7 November, the price of Solana fell by nearly 6% to about $30.50. This selloff came as a part of a more significant downtrend that started on 5 November when the cryptocurrency hit a high of $38.75.
Between then and now, SOL has fallen by more than 20%. Over the last day, the cryptocurrency has fallen by a staggering 40% from a $31 high to the $17 zone where it now sits.
The start of Solana’s price dip happened almost the same as the trouble with SBF, FTX, and the reports that Alameda Research had liabilities worth $8 billion but may not have the liquidity to meet those obligations.
Solana (SOL) Price Analysis
Since August 2022, SOL broke above the $30 zone and tested it twice before moving to the upside. The bulls’ strength showed SOL recovering to nearly $37.
However, the bears soon caught up to the bulls on the 5 November after the $38 peak, and Solana entered a freefall.
Eventually, the cryptocurrency broke through the $30 mark and declined even further downwards.
Several indicators show extremely bearish conditions on Solana, some even predicting further drops.
For example, indicators like the money flow index (above) from the medium-term perspective show the cryptocurrency’s price rapidly approaching oversold conditions. This indicates that Solana may start to cool off very soon.
Solana has also broken through its lower Bollinger band on the medium-term perspective, supporting the verdict of the money flow index that the cryptocurrency may experience a price retracement soon.
From a longer-term perspective, it is clear that Solana has hit the $16 zone (red line), a support level it last tested in March 2021.
While Solana may reverse to the upside as the bears retreat to gather their strength, the cryptocurrency still needs to be precise.
Can Solana Fall To $5?
FTX witnessed massive withdrawals and a liquidity bottleneck in the last 48 hours following the FTX-Alameda controversy and CZ, the CEO of Binance’s comments about selling Binance’s FTT holdings.
So far, and according to a tweet from Sam Bankman-Fried, these crypto giants have agreed on a “strategic transaction” that may involve Binance taking over FTX (or a part of it).
According to the tweet, Binance will be helping out with clearing the withdrawal backlogs and “liquidity crunches.”
Looking at the charts, the price action of Solana from April last year until the date can be drawn as a head and shoulders pattern, with the April 2021 peak forming the left shoulder and the August 2022 peak forming the right shoulder.
Solana is currently testing the formation’s neckline around the $17 – $16 price level (blue line above). If a price decline occurs from this point, Solana may fall even more profoundly than anticipated and test the $16 zone.
While things look exceedingly bearish on Solana, the market may turn bullish again from a medium perspective if the bulls push the cryptocurrency’s price upwards into a retest and then a breakout of the $30 zone.
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